A bipartisan legislative initiative in the U.S. Congress seeks to reinforce the fundamental role of cash in retail transactions, addressing critical concerns about financial inclusion and consumer choice. This proposal aims to ensure physical currency remains a widely accepted payment method across the country, impacting daily commerce for millions.
- The Payment Choice Act, introduced by Senators John Fetterman (D-Pa.) and Kevin Cramer (R-N.D.), mandates cash acceptance.
- Businesses with physical locations must accept cash for in-person sales up to $500 per transaction.
- Exceptions include providing fee-free cash-to-prepaid card conversion devices, or temporary non-acceptance due to system failures or insufficient change.
- For an initial five-year period, businesses are not required to accept $50 bills or larger denominations.
- Following this period, the Secretary of the Treasury will issue a rule mandating acceptance of $1, $5, $10, and $20 bills.
- The legislation emphasizes preserving financial inclusivity for unbanked Americans and upholding consumer choice.
Key Provisions of the Payment Choice Act
The core of this legislative effort, spearheaded by Senators John Fetterman and Kevin Cramer, is the introduction of the Payment Choice Act. This bill directly confronts the growing trend towards cashless operations by mandating that businesses accepting in-person payments at a physical location must accept cash for sales up to $500 per transaction. This measure reasserts the foundational role of U.S. currency within the broader economy, recognizing that a significant portion of the population continues to rely on physical tender for daily purchases.
The proposed legislation includes specific carve-outs to ensure practical implementation while maintaining its primary objective. Businesses would not be compelled to accept cash if they offer a device that allows consumers to convert cash into prepaid cards without incurring any associated fees. Furthermore, the bill permits temporary non-acceptance under specific operational circumstances, such as a point-of-sale system failure or insufficient cash on hand to provide change. These exceptions acknowledge the logistical realities faced by merchants while upholding the spirit of the mandate.
A nuanced approach is outlined regarding the acceptance of larger denominations. For an initial five-year period following the bill’s enactment, businesses would not be required to accept $50 bills or any larger denominations. This phased implementation allows for a transitional period. Subsequently, the Secretary of the Treasury would be tasked with issuing a rule that would then mandate the acceptance of $1, $5, $10, and $20 bills, outlining a comprehensive path toward universal cash acceptance for commonly used denominations.
Rationale and Broader Implications
The proponents of the Payment Choice Act underscore its critical importance for financial inclusivity. Senator Fetterman highlighted the plight of unbanked Americans—a demographic that, according to FDIC data, represented approximately 4.5% of U.S. households in 2021—who rely predominantly on cash for basic necessities and transactions. For these individuals, the increasing prevalence of cashless establishments can create significant barriers to accessing essential goods and services, exacerbating existing economic disparities.
Senator Cramer further emphasized the fundamental status of cash as legal tender, arguing that restricting payment options or imposing additional premiums for cash transactions undermines consumer choice. The legislation is designed to preserve broad access for all citizens, ensuring that the preferred payment method for millions remains viable across a wide array of retail environments. By affirming cash’s enduring role, the bill seeks to safeguard a fundamental aspect of consumer freedom and economic participation in a rapidly evolving payment landscape.
Jonathan Reed received his MA in Journalism from Columbia University and has reported on corporate governance and leadership for major business magazines. His coverage focuses on executive decision-making, startup innovation, and the evolving role of technology in driving business growth.